"Recently, with an offensive retail strategy and in some cases comparable price points, Apple has competed with the likes of Louis Vuitton, Cartier or Prada which made us raise the question: is Apple actually a luxury stock? Yes," analyst Erwan Rambourg wrote in a note to clients Tuesday.

"Apple's retail penetration can grow substantially, and it has the talent to help it grow. Apple has poached talent from luxury companies, which can give it insights into premiumisation as well as mainland Chinese consumers, the key luxury consumers and still today in our view the future of that industry."

Rambourg noted Apple has 500 retail stores with over 500 million store visitors per year. He is optimistic the company will be able to grow its retail presence.

"The brand is just scratching the surface of its retail potential," he wrote. "Direct-to-consumer online sales and retail sales together represent 25% of total sales today at Apple, and this should only increase in our view. We do not believe there is a cap for now in terms of retail penetration."

Apple is one of the market's best-performing large-cap stocks this year. Its shares have rallied 44 percent through Monday versus the S&P 500's 15 percent gain.

"Apple competes well across all of these different sectors because of its versatility in its functionality, but like luxury brands, it's also competing as a way to express status and to fit in," he wrote. "Consumers are buying the spirit of the brand and the way it makes them feel about themselves and in society."